After A Nine Year Hiatus, The DOL Issues Two New FMLA Opinion Letters

The Department of Labor last issued an FMLA opinion letter in January of 2009, that is, until August 28, 2018, the day that the DOL issued two new Opinion letters dealing with the FMLA. As we have discussed in the past, when a regulatory agency issues an Opinion Letter or Guidance, it behooves us to take heed. They are the agencies’ way of telling us how they are going to construe the laws that they enforce. And, although such Letters and Guidance are not binging on civil courts, the courts often refer to them in their opinions.

FMLA20180-1-A – Organ Donor Leave:   In FMLA2018-1-A, the DOL stated that an otherwise healthy employee that chooses to donate an organ may be entitled to FMLA leave if the procedure and resulting recovery qualify as a  a Serious Health Condition. If the procedure and recovery do not meet the definition of a Serious Health Condition, the leave would probably not be covered by the FMLA. The fact that the procedure is voluntary is not relevant to the FMLA-qualification analysis.  As with most FMLA determinations, this requires a case-by-case analysis.

FMLA2018-2-A – Application of Disciplinary Point Systems to Employees on FMLA Leave:   In FMLA2018-2-A, the DOL addressed an employer’s no-fault attendance policy that suspends or “locks in” an employee’s disciplinary points while on FMLA leave. Under this policy, points rolled off every twelve months.  However, the employer locked in the points while its employees were out on any type of “protected” leave, such as FMLA, workers compensation, pregnancy, ADA…… The DOL stated that point reduction is a reward for working, and thus a benefit to which an employee on FMLA leave might not be entitled – as long as employees on other types of leave are treated the same.

This should give employers an additional tool to prevent employees who have almost accumulated a “terminal” number of points from taking FMLA leave in an attempt to allow some of their points to roll off whilst they are on leave. Keep in mind that the DOL’s blessing of this type of policy is based upon the fact that all types of protected leaves are treated similarly.

Don’t hesitate to contact me directly if you have questions concerning these or any other issues.

Does Your Last-Chance Agreement Contain A Prospective Waiver? It Probably Shouldn’t

As part of a progressive disciplinary process, we sometimes require employees to sign a document in which the employee acknowledges his past deficiencies and the fact that if his performance does not measurably improve, his employment will be terminated. (A “Last Chance Agreement”, because this is his last chance…..). There is nothing inherently illegal or wrong with an LCA, and they can be useful tools, both in an attempt to rehabilitate the employee and as proof that the employee was fully aware of the true reasons for his termination, if a termination occurs.

However, employers sometimes give in to the temptation to overreach in an LCA and include waivers of potential employment-related claims. That is precisely what got the Department of Veterans Affairs in hot water in Illinois a couple of months ago. The facts are as follows:

Mr. Lester, a sixty year old African American male worked for the Department of Veterans Affairs. Mr. Lester filed a race discrimination claim against the Department. As part of a mediated settlement, Mr. Lester was transferred to new location and required to sign an LCA. The LCA contained a provision that required Mr. Lester to waive all future claims that he may have against the Department. Shortly after his transfer the Department fired Mr. Lester. (Smells a little fishy?)

As one would expect, Mr. Lester sued the Department, claiming in part that the provision requiring the waiver of future claims constituted a materially adverse action that would dissuade a reasonable person from engaging in protected activity and, as such, constituted unlawful retaliation against Mr. Lester for filing a claim of discrimination against the Department. (The logic being-if a worker filed a claim of discrimination, the department would force you to either waive all future claims as part of the LCA or else be fired, thus reducing workers’ propensity to file complaints in the first place.)

The take-away from this case is:  We should be extremely cautious in presenting employees with waivers that require them to waive or release future claims or causes of action. When I say “extremely cautious,” I mean don’t do it. Waiving claims arising out of past conduct is probably OK, but waiving claims arising out of as-yet-to-occur, future conduct is probably not enforceable and may well give rise to a retaliation suit, as the Department of Veterans Affairs learned.

Did You Know That Louisiana Law Treats Employees and Independent Contractors Differently?

I was in state court this week, the 19th Judicial District to be precise, arguing an often-overlooked provision of our non-compete statute. The opposing party, let’s refer to them as “Overreaching, Money-Grubbying Bully” or OMGB for short, was attempting to enforce a non-compete agreement against my client, who we will call “Winner.” Specifically, OMGB claimed that my client was in violation of the agreement because he began to solicit customers of OMGB immediately after his services as an independent contractor had been terminated.

We argued successfully that while our non-compete statute allows an employer and employee to agree that an employee will not: 1) engage in business similar to that of her employer or 2) solicit customers of her employer after her employment ceases, on its face the statute only allows an independent contractor to agree that she will not: 1) engage in business similar to that of the party with whom she has contracted. The statute contains no language that would allow an independent contractor to be prevented from soliciting customers of the party with whom she has contracted.

In this instance, my client was not engaging in a competing business in any prohibited parishes, she was merely soliciting customers of the party with whom she had contracted. Although I believe that the difference in the language of the statute as it applies to employees and an independent contractors was due to legislative oversight (perish the thought) rather than intent, the difference is nonetheless there. So, if you are drafting a non-compete agreement between your company and an independent contractor, remember that while you can prohibit them from engaging in competition with you, you probably cannot prevent them from soliciting your employees.


Logic Prevails At The NLRB! Some Common Sense HR Policies Are Legal Once Again!

You may recall that in the last year of the Obama administration the National Labor Relations Board issued a Memorandum declaring that a number of what most of us consider to be common sense HR policies were “presumed illegal” because they could have a “chilling effect” on employees’ Section 7 rights.

On Wednesday the NLRB reversed itself and issued a Memorandum stating that nine of these standard HR policies will now be “presumed lawful.” This Memorandum will require some employers to modify their Handbooks; for others, only the application of their existing policies will change. In both instances, the changes will be to the benefit of employers. I have provided a brief summary of the new “presumed lawful” policies for your perusal as well as a couple that are still presumptively unlawful. Continue reading “Logic Prevails At The NLRB! Some Common Sense HR Policies Are Legal Once Again!”

The Perfect Storm: A Convergence of Unpaid Rest Breaks, the FLSA and the FMLA

As most HR professionals are aware, the Fair Labor Standards Act (FLSA) requires that non-exempt employee be paid for rest breaks of up to 20 minutes. Contrary to the common misperception that the Act requires employers to allow two paid breaks per shift, in most industries, it actually does not mandate any certain minimum or maximum number of paid breaks per shift.beverage break breakfast caffeine

Conversely, the Family and Medical Leave Act (FMLA) require employers to allow employees short breaks when certified as necessary by a health care provider. Unless the employer specifies otherwise, FMLA breaks are usually unpaid.

You see the inherent conflict set up between the FLSA (you must pay for short breaks) and the FMLA (FMLA leave is generally not compensable working time). For example, if an employer allows its employees to take three paid, fifteen minute beaks per day, can it not pay an employee for taking one, fifteen minute FMLA-qualified break per day without violating the FMLA or FLSA? Will this constitute retaliation or interference under the FMLA?

Continue reading “The Perfect Storm: A Convergence of Unpaid Rest Breaks, the FLSA and the FMLA”

Good News For Employers! U.S. Supreme Court Rules That Class and Collective Action Waivers in Arbitration Provisions are Enforceable

Chalk one up for the good guys! In a 5-4 vote, the United States Supreme Court held today that employer-mandated arbitration provisions containing class and collective action waivers are enforceable. I realize that this sounds a bit esoteric to get so worked up about, (I have used TWO exclamation points already.) but this ruling has the potential to save you a LOT of money.

As you know, class and collective actions are incredibly expensive to defend and they often result in hugely costly settlements and judgments. This is particularly true when dealing with collective actions under the Fair Labor Standards Act. As unfair as it seems, under the FLSA employers are usually only allowed to depose a very small sampling of the collective plaintiffs. The Courts extrapolate the data from this small representative group to the entire class to determine if the employer is liable and how much it owes. Often, most members of the collective group do nothing more than sign an opt-in card and then cash their settlement check. Since employees know that they will never be deposed or have to testify at trial, they are inclined to join these types of suits whether or not they have actually been wronged or suffered any damages.

The ruling today gives employers a way to significantly reduce the likelihood that employees who have not been harmed bring FLSA claims. We now know that with a valid arbitration agreement in place, each employee will be required to arbitrate their FLSA claim against the employer separately, rather than as part of a collective group. In arbitration, each employee will have to affirmatively prove up their own case. This will significantly reduce your chances of being sued under the FLSA.

As with most things “legal,” the details of the agreement matter, and this is not a total cure-all for all FLSA liability. But, for many employers, a properly drafted arbitration agreement containing a class/collective action waiver could save your company literally millions of dollars. Consult with your legal counsel to ensure that your arbitration agreement will pass legal muster.

IRS Issues Assistance on New Paid FMLA Tax Credit

The IRS just issued a FAQs sheet regarding the new Tax Cuts and Jobs Act of 2017 that created the Paid Family and Medical Leave Tax Credit. The tax credit allows eligible employers to claim a general business tax credit of up to twenty five percent of the wages paid when employees take paid family and medical leave.

Generally, in order to utilize the tax credit, an employer must have a written policy allowing for at least two weeks of paid FMLA and pay employees on FMLA leave at least fifty percent of their usual wages receive. In 2018, the tax credit will only be available for payments to employees who made less than Seventy Two Thousand Dollars in 2017.

Most forms of paid leave, (vacation leave, personal leave or sick leave) will not be considered paid FMLA leave for purposes of the Act and such payments will not be applicable for the tax credit.

Lastly, the FAQ indicated that the IRS was going to issue other FAQs addressing various aspects of the FMLA tax credit. I will keep an eye out for these FAQs and send out new updates as they are issued.